In this interview, a financial management and debt recovery expert, Dr. Osifo Igbinoba, speaks on how to get chronic bank debtors in the country to repay their loans. Segun James brings the excerpts:
Recently, the federal government disclosed that very few persons owe the Asset Management Corporation (AMCON) a staggering N5 trillion and this is affecting the corporation. What is your take on this?
First and foremost, we need to understand that AMCON came into existence on December 2010 and the reason why AMCON came into existence was the fact that Nigeria wanted to reduce the failure of banks within the economy and to boost customer confidence, so banks will not fail any longer in the country. Now, we need also to give the government some clap in that regard because if not that AMCON came in to save depositors’ funds at that time, a lot of people would have lost their money at that time. Now, what AMCON has done was to save depositors or what the government has done at that time was to save the depositor from losing their money to chronic debtors or banks. And what government has done regarding AMCON, is what we can call securitisation. Now, securitisation is a process whereby you buy in a debt through raising a bond. AMCON came in through that perspective, they bought all those debts through securitisation to ensure that depositors’ funds at that time were secured by all those banks. So they injected the money in, in order to save the depositors. If you can recall, you will find out that at that time AMCON even took over some banks. Now, AMCON needs to go after debtors in this kind of economy where research has shown that 90 per cent of billionaires are debtors. It is depositors’ fund that they use to enrich themselves, and in the long run, for them to pay back, it becomes a problem because they don’t want to go back down again. You see them buying 20, 30 and 40 properties. They will now be claiming or telling you that they are not owing any bank. What is the genesis of their business? Were they making money before in business? The bank came in to support them in their business, but they took advantage of that and diverted all this money. And the government is saying they need to pay back. So, what most of the debtors do now is to engage a lawyer or a consultant thereby frustrating the effort of AMCON and AMCON has been asking those debtors to come forward so that they can do a sort of restructure for them to repay. The essence of AMCON doing that is to ensure that we give them a soft landing so that they can pay back their loans. But the debtors won’t accept that. They will rather go to court and spend 10 years or 20 years pursuing the case.
So, the government needs to come in this regard, to see how they can frustrate those debtors in order for them to realise that what they have done is killing the system, not their own business alone but the entire country. This is because with seven or 10 people owing N5 trillion, how much is the budget of Nigeria? The initiative of the government in bringing AMCON is the best. Like I have said before, without the financial system, there is no economic system. These people go to the bank to borrow money in the pretence that they want to establish a company or expand; the bank will give them the money, but because they are crooked in nature, they will divert those monies and it becomes an issue. So what I believe that AMCON should do is that they should employ some other professionals that are not lawyers; because the style they use now is that they involve ICPC, EFCC. So, I am appealing to the management of AMCON to take alternative measures to recovery. There are so many alternative measures to debt recovery that they can adopt and they need to engage professionals. The debtors can be rendered useless in the sense that he won’t be able to transact any business with his name until when he pays his debt. For me as a professional, I have the factors we can employ to cripple those “big men” who are holding the economy to ransom. Once the fact has been established that he owes, I have the systematic process we can apply that will coerce them to pay their debts.
Don’t you think the bankers are culpable in the whole process?
What you need to understand is this, bankers are not magicians, and they are also people like us. Now, it is just like saying that journalists know everything in Nigeria, obviously no! It is what you are being informed that you are going to put out, it is the information you have that you are going to give to the public. What I am trying to say in essence is that these people in one way or the other may have been blacklisted. In banking, if you are owing and you are not paying as at when due, automatically the system will blacklist you and you won’t be able to borrow from banks anymore, this is what professionals like us would do. But what these people will do is that they will go and register another company, they will not be a director to the company, but they will just be a signatory to the account. In that regard, the system will not get them because they are not a director of the company. They are just signatories to the company. So, being a signatory to the account is just a board resolution that anybody can be appointed to be a signatory to the company. So, that is why they still run another company different from the company they use to borrow money. And if you ask them, they will say the companies they use in borrowing money have been liquidated. So they have a systematic way of defrauding banks. I have been doing recovery in the past 15 years, so I know they have a systematic way of defrauding banks. So in the long run, what the government should do under AMCON is that most of these people should be crippled in the economy. That is why I said they should involve professionals that are different from lawyers so that they can give them some other information they can use to cripple them (debtors) within the system. So, when you cripple them, you close mark them, then you get the number of monies they have in the banks and also the properties they have, not only in Nigeria, but outside Nigeria. Let me give you a scenario with a bank, which I will not mention, this individual went to the bank to buy a vessel and claimed that the vessel is worth N15 billion and the bank gave it to him. They bought the vessel; they paid the money to the importer that is the manufacturer of the vessel. In the course of our investigation, we found out the cost of the vessel is not more than N4 billion. So, technically this man has stolen N11 billion off the bank. Tomorrow, this man will come into the country and begin to say he is a billionaire, whereas he has defrauded the bank. It is the depositors’ money that he has taken. So we went to the manufacturer and he told us that he asked them to put X, Y, Z of the money. So what am trying to say in essence is that these are chronic debtors, they have a way of designing the facility to ensure that they stole from the system. So what is the system putting on the ground? A chronic debtor is like a fraudster, they come into the system, rob the system and most of them don’t even live in the country any longer. Go and trace those people that owe AMCON that huge amount, most of them don’t even live in the country. They use this country as the second country, they have another country because they made a lot of money here, so they render the economy useless and they run back to another economy. So what the government needs to do is that most people that are into debt management also need to come out to support the government.
But how many people have really gone to jail because they owed banks?
They just go to court and the case will drag on for a long time because these people are perpetual debtors. They won’t pay, all they will be telling you is that the bank defrauded them some time ago, but they actually borrowed the money. Pay the amount of money they claim to borrow from the bank, they won’t pay, until when he now begins to have a bad transaction on that facility that is when the man begins to understand that this man is something else. And it would have taken that bank to release 50 per cent or 100 per cent of the money.
What is the way forward?
The way forward for me is that the government should bring in a system where debtors are crippled in the economy. They are crippled to do transactions, they crippled to contest as politicians or appointed. Anybody you want to appoint, if he does not owe the bank you can appoint him, but if he owes the bank, don’t appoint him. Anybody that wants to contest for anything, even if you want to be a minister, they must be screened, if they are owing a bank, they should go and clear with the bank. Professionals like myself can do much more to recover these monies from the ‘big men’. I can create the systems to cripple them, getting over N5 trillion into the coffers of the government means a lot to the economy. If five chronic debtors for instance, are owing banks and I am the president and I want to appoint them, I ask them to go and pay and apply other factors as a professional. Do you know how the economy will boom? You cripple them in the economic system if they owe. So, there is no way they will not repay.